Bajaj Auto fixed June 24 (Wednesday) as the record date for its Rs 5,633 crore share buyback. Only those shareholders who own the shares of the company in their demat accounts as on the record date will be eligible to tender shares.
As per SEBI’s T+1 settlement norm, investors must buy the company’s shares at least one trading day before the record date so that they are credited to their demat accounts by that date, making them eligible for the reward. This makes June 23 (Tuesday) the last date to buy the shares so that they are credited to the shareholders’ accounts by the record date (Wednesday).
All about Bajaj Auto’s share buyback
Bajaj Auto in May announced its board had approved a plan to buyback up to 46.94 lakh shares, each with a face value of Rs 10, representing 1.68% of the total paid-up share capital, for an aggregate amount not exceeding Rs 5,633 crore. The buyback will be conducted via the tender route at a price of Rs 12,000 apiece, implying a premium of nearly 18% to the stock’s previous closing price.
Also read: Bajaj Auto’s Rs 5,633 crore share buyback | Key things to know
This comes after a Rs 4,000 crore buyback of shares in 2024 for Rs 10,000 per share. Buyback of shares refers to a corporate action where a company repurchases its own shares from existing shareholders, mostly at a premium to the market price.
How much profit can investors make from Bajaj Auto’s share buyback?
The company is yet to announce the entitlement ratio for its share buyback. At the buyback price of Rs 12,000, a small shareholder can purchase a maximum of 17 shares to be eligible for the small shareholder quota for the buyback, Sunny Agrawal, Head of Fundamental Research at SBI Securities, estimated.
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“Assuming an acceptance ratio of 55%, 9 shares will get accepted for buyback at Rs 12,000/share. The remaining 8 shares will remain with the investor,” he added. Assuming the market price remains unchanged at Rs 10,000, the total return on investment comes to nearly 10.6%, according to the analyst.
“The return potential can be higher if the stock gains from the CMP of Rs 10,000 as well as if the acceptance ratio is higher. Fundamentally, Bajaj Auto is witnessing decent demand recovery in the domestic market with its refreshed motorcycle portfolio. Electric scooter sales volume growth is also strong with company being the 2nd largest player in the domestic E-2W market. Company is also witnessing healthy demand in the export markets. Investors can therefore buy to participate in the buyback,” Agrawal further said.Also read: Bajaj Auto sets June 24 as record date for Rs 5,633 crore share buyback. Here’s all you need to know
Should you buy Bajaj Auto shares to participate in buyback?
Investors who still do not hold any shares of Bajaj Auto, the buyback alone is not the right reason to enter, according to Harshal Dasani, Business Head of INVasset PMS. He highlighted that business and valuation fit should drive the decision. For investors who already own the stock in their portfolio, Dasani believes that the reserved-category mechanics make participation a useful arithmetic exercise.
“The buyback typically comes at a premium to the prevailing market price, with retail shareholders (those holding shares worth up to Rs 2 lakh) sitting in a reserved category that historically sees acceptance ratios close to 100% of tendered shares,” Dasani explained.
Market regulator SEBI has mandated that 15% of a buyback’s total offer size must be reserved for small shareholders. From Bajaj Auto’s context, this means that around 7.04 lakh shares worth Rs 844.92 crore at the buyback price will be reserved for small shareholders holding shares worth up to Rs 2 lakh on the record date, Anand Rathi highlighted in its research report.
“As per shareholding data of annual report 2025, individual investors qualifying above criteria held approximately 64,16,761 shares, implying an acceptance ratio of around 11% for retail investors. Thus, the overall acceptance ratio for retail investors is 11%,” the research analysts at the firm explained, while noting that the acceptance ratio can change on record date.
Historically, buybacks where promoters abstain from participation tend to witness relatively better acceptance ratios for retail investors compared to institutional categories, said Uttam Kumar Srimal, Senior Research Analyst at Axis Direct. “Since promoters are not participating, the effective competition for tendering shares reduces significantly,” he said.
This implies higher probability of share acceptance in retail category, the analyst said, adding that this also may lead to potential arbitrage opportunity if purchased below buyback price. Additionally, lower outstanding equity supports EPS improvement, he added.
The buyback is also a strong signal of management confidence and surplus cash generation, Srimal said. “We believe the buyback announcement reflects Bajaj Auto’s strong balance sheet, healthy free cash flow generation, efficient capital allocation approach and confidence in long-term business fundamentals,” he added.
“The non-participation of promoters materially improves attractiveness for retail investors under the tender offer mechanism. Final gains, however, will depend on acceptance ratio, stock price movement before record date, participation level from retail category. Investors should closely monitor the upcoming record date announcement and letter of offer before taking participation decisions,” he concluded.
Also read:What Jefferies, Nomura and other brokerages said after Bajaj Auto’s Q4 results
Bajaj Auto share price
Bajaj Auto shares fell over 3% in one month. The stock overall gained nearly 7% in 2026 so far. The stock jumped 22% in one year.
In the longer term, the shares of the two-wheeler maker delivered nearly 122% returns over three years and around 142% in five years. The company currently has a market capitalisation of more than Rs 2.85 lakh crore.
Also read: Sebi board approves reintroducing open-market window for share buybacks from August 1
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)